Etsy, a marketplace for kitschy and creative DIY goods, acquired Depop, a hippy and thrifty marketplace for resale goods, for $1.625 billion this week. So, today we'll discuss the tale of two marketplaces, a deal that has given us a peek into the evolving ethos of social shopping. Depop, for those that don't know, is a London-based company that targets millennial and Gen Z shoppers. Within the past two years, Depop has grown its user base of stylists, designers, artists, vintage sellers and more, from 13 million to 21 million, And, the company claims, some 90% of its users are under the age of 26. With the buy, Etsy is growth hacking its way into a younger generation, one that thinks thrifting is trendy and individualism is more interesting than fast fashion. But to me, combining two, two-sided marketplaces is not where the work stops. Etsy, with Depop under its umbrella, has an opportunity to be far more inventive with the way it combines operations. First, Etsy needs to find other ways — beyond a new volume of fresh goods — to modernize its user experience, from homepage to checkout. Why? Because, and I can say this because I am technically part of the cohort, Gen Z is impatient. Sure, thrifting is trendy — but so is Amazon. The same generation that loves the idea of sporting the individual creative, also loves the idea of low-cost goods and two-day shipping. Sure, there are people that sit at either extreme. But I'd bet an unnecessary milk frother that the majority of Gen Z consumers sit in a more grey space. Secondly, Etsy and Depop have an opportunity to invest in the growing wave of social shopping experiences. When I saw this news break, I immediately thought of The Landing, a company that is using customizable and collaborative mood boards as a shopping tool. The startup allows users to create mood boards from products that they can then shop from. Right now, it's starting with interior design, but the vision can easily extend beyond home goods into clothing or CPG products. Similar to Pinterest, The Landing is trying to serve a set of consumers that like shopping in a collaborative, scroll-friendly way. I'm not asking Etsy to go full early-stage startup, but it would certainly be compelling if it found new ways for consumers to experience its broadened marketplace. I'll stop there, and end with this: As more and more companies prioritize serving Gen Z, strategy needs to be more than a land grab. As one person put it, Etsy is "ensuring the brand translates through different generational ethos," with the acquisition. I'm excited to watch this case study in the making play out. In the rest of this newsletter, we'll discuss digital health, the beautiful world of S-1 filings and a Medium memo that has caused employees to leave the company. As always, you can find me on Twitter @nmasc_. Scoops keep me happy, so if you have a tip on an early-stage deal or drama that I should know about, DM me or e-mail me at natasha.mascarenhas@techcrunch.com. |
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